Tax charge trims HP profit

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US tech giant Hewlett-Packard said its net profit for the latest
quarter fell to $US73 million ($A94 million), due to a hefty tax
charge on repatriated profits under an incentive provided by US
law.

Although the profit was down sharply from $US586 million in the
corresponding period a year ago, the results were reduced by $US960
million in taxes as the company repatriated some $US14.5 billion
from overseas.

Excluding one-time items, the computer and technology services
group earned $US1.1 billion, or 36 US cents a share as revenue grew
to $US20.8 billion.

By that measure, the company beat the estimates of analysts
surveyed by Thomson First Call, who forecast a profit of 31 US
cents a share, on $US20.5 billion in revenue in the third fiscal
quarter to July 31.

"We executed well in the third quarter with double-digit revenue
growth, solid margin improvements in key segments and strong cash
flow," said Mark Hurd, HP chief executive officer and
president.

"I'm encouraged by what we have achieved to date, and we are
focused on driving further performance improvements."

HP, like many other US multinationals, repatriated its cash to
take advantage of a one-time provision for a lower tax rate under a
measure passed by Congress.

Imaging and printing remained HP's most-profitable business
unit, with an operating profit of $US771 million and $US5.9 billion
in revenue.

HP said its PC unit earned an operating profit of $US163
million, up more than sevenfold from a year ago as sales rose 8.5
per cent to $US6.4 billion.

The results came in the midst of weaker-than-expected sales
reports and forecasts from HP's top PC rival, Dell, and smaller PC
makers Gateway. Both companies posted revenue figures below Wall
Street estimates and gave outlooks that fell below analysts'
expectations, citing pricing pressures.

HP forecast that it would earn between 44 US cents and 47 US
cents a share, excluding charges, for its fiscal fourth quarter on
revenue in a range of $US22.4 billion to $US22.8 billion. Analysts
expected a profit of 43 US cents a share on $US22.7 billion in
sales.

The company said it expects to take an after-tax charge of
$US900 million in the fourth quarter, due to workforce reductions.
HP recently said it would cut 14,500 jobs over the next 18
months.